I was reading the various pop-wonk web sites and noticed something last week. They got my attention by talking about my native Atlanta in two related articles. One vilified Atlanta for being one the most income unequal place in the US, the other condemned it for being one the least income mobile places. I wondered if the rest of the nation was this bad off, and what could be done about it
As one more post in my “Half Baked Wintry Schemes” series, I’d like to talk about income inequality and income mobility. Income inequality has been in the news quite a bit lately, as America is now peer nations with the Phillipines and Bulgaria. Much of Africa is more income equal than we are, as are noted class-hierarchies India and the UK. At least we’re still more equal than “Communist” China. But surely some of us are more unequal than others:
Another measure of wealth distribution is income mobility. How likely is a child born to a poor family to further their station in life? This is the typical Horatio Alger “Rags’ to Riches” story. If every poor child grows up to be a rich adult, the gini index could be murderously high, but everybody who lived and worked long enough could get to the good life. This is the “Herman Cain” model of prosperity, after all. If we are all CEOs, then we are all rich, right?
The two maps are not the same, and I’ll need to look at the data if I want anything more than cursory conclusions. There is more spatial autocorrelation in the Income mobility map. That is, the value of a county is more likely to be like its neighbors than not. This is graphically striking as there are more bands of color in the mobility map than in the inequality maps. I would expect the mobility map to have more noise, not less.
The one bright spot in America’s income mobility, the Dakotas, is there because of fracking and the Brakken Shale. This new oil technology and industry is making Ameirca one of the top oil producers in the world, something it has not been in my entire lifetime. Upward income mobility in the Dakotas is pretty easy, as the median income before Fracking was so low, and the population was so sparse.
So is expensive oil the cure for our employment woes? Hardly. There’s not enough places to frack, and there’s pretty strong oppostion to it in many states. Other noworkable “solutions” include a hike in the minimum wage or more income taxes on the rich. A higher minimum wage just means that fewer low wage employees will get hired, or replaced by machines. Business process machines and software are getting cheaper every year, and raising the price of human labor only makes them more appealing to companies that just need to produce goods or services, not run a charity. Higher income taxes on the wealthy only transfer money to government coffers and enrich tax preparers and accountants, not the households that could use more wealth.
The weak recommendation that I don’t hear enough is that we need jobs: things to do that people find worth doing. One way of forcing trickle-down economics would be offering a tax write-off for every employee of a firm, but this would lead to perverse hiring of the semiskilled, rather than working for competitive advantage. I have heard a tentative argument claiming that we need more and better access to the internet, so we can all make our livings on etsy and the like. While I might find that laughable, it might be the most logical extension of the internet’s erosion of expertise and privilege. As with the other things I’ve written this year, more on this later.